Inside Gaming: Case challenges state regulators working across jurisdictions

The case against Michael Colbert, for his alleged role in internet sports betting malfeasance, has brought the Nevada heat on his former employer.

A state investigation of sports book operator Cantor Gaming, launched after a company official was indicted for his alleged involvement in an illegal bookmaking and money laundering operation, has gone radio silent.

That doesn’t mean the matter has been swept away — not by any stretch.

Sources confirmed last week the Gaming Control Board’s inquiry into Cantor is moving forward, albeit at a slow pace.

Agents are trying to determine to what extent Mike Colbert, Cantor’s former sports book director, had with the betting operation, which was associated with offshore Internet wagering sites.

Investigators also are trying to determine if any of the illegal bookmaking allegations can be linked to Cantor. The state-licensed sports book operator was not a target of prosecutors, nor was the company even mentioned in the New York-based indictment.

After the inquiry opened, Cantor instituted damage control measures. The company distanced itself from Colbert, immediately severing ties with the oddsmaker.

Cantor went about its business. The company operates eight Las Vegas race and sports books — The Venetian, Palazzo, M Resort, The Cosmopolitan of Las Vegas, Tropicana, Silverton, Hard Rock and Palms — poker rooms, and manages a line of mobile gambling products.

However, Colbert has suddenly resurfaced.

Cantor officials can’t be too happy about this turn of events.

Colbert, 33, was the most prominent name among the 25 individuals indicted in October by New York authorities on allegations of ties to the illegal betting ring. Law enforcement alleged the operation yielded payouts of $50 million over an 18-month period.

Paul Sexton (no relation to Mike) is a former Full Tilt player accused of running money for an illegal online sports gambling ring. [GPI profile]

A lawyer for a former Cantor Gaming executive charged with four felonies in connection with an illegal bookmaking ring said Thursday he will plead not guilty later this month at his initial court hearing in New York.

Michael Cristalli, a Las Vegas-based lawyer, declined to comment on the charges against his client, Mike Colbert. Colbert was arrested with seven other people in Southern Nevada on Oct. 24 on warrants stemming from an 18-month investigation into illegal bookmaking and money laundering.

He is scheduled to make a court appearance in New York on Nov. 29.

Colbert on Thursday did not speak during a procedural hearing in Las Vegas Justice Court. He is charged with enterprise corruption, conspiracy to operate an illegal gaming enterprise and three counts of money laundering.

Cristalli said Colbert’s next court appearance in Las Vegas is scheduled for Dec. 3. He remains free on $50,000 bail.

Colbert appeared at the hearing with Jerry Branca, Steven Diano [GPI Profile], Joseph Paulk, Paul Sexton and Ian Mandell. Brandt England and Kelly Barsel were in New York for their initial hearings and did not appear in court Thursday.

Cantor Gaming officials on Monday said the company has been working closely with Nevada gaming regulators after the arrest of Mike Colbert, now a former vice president and director of risk management with the Las Vegas-based company.

Colbert was one of eight people arrested Wednesday in Southern Nevada in connection with a nationwide illegal bookmaking operation that generated $50 million in seven months.

Robert Hubbell, a spokesman with Cantor Gaming in New York, said Colbert was no longer an employee with Cantor Gaming. He said to date the company has “found nothing to indicate that (Colbert) was using our system or accounts for wrongdoing.”

“Although the charges were not related to his responsibilities at Cantor Gaming, it is important to note that our account wagering system is designed to prevent misconduct,” Hubbell said in a statement.

“The former employee’s responsibilities with Cantor Gaming had nothing to do with accepting or distributing patron money.”

Colbert on Monday did not speak during his brief initial procedural hearing in Las Vegas Justice Court.